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Insights and headlines from Shore analysts on trends in enterprise and media content markets.
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| Friday, February 26, 2010 |
  I just sent off some responses for an email-based interview as background for an upcoming article on ebooks in a magazine. I thought that I would share them with you in the raw here to open a discussion on ebooks that we can continue on Buzz or via the comments section of this blog. What are your thoughts about how publishers should approach ebooks?
Questions and my responses:
—It seems like the specifications for e-readers vary widely from device to device, and this year’s offerings look just as varied. Are there particular capabilities or specifications that publishers are really looking for from e-readers right now? What would an e-reader “silver bullet” device need to be capable of?
Some publishers are beginning to consider new content and features for ebooks, such as video interviews with authors and "hooks" into Web content such as social media services. In some instances publishers are hoping that such value-add content may allow them to command higher prices for ebooks than the prices that have dominated for ebooks from major publishers since the introduction of ebooks on Amazon's Kindle platform. To this end a platform such as Apple's new iPad is attractive to publishers, as it offers a device that can work well as a general computer and as a display mechanism for rights-protected content. But there will be relatively few titles that will be targeted for such enriched content. So what is the "magic bullet" platform for ebooks? The one that's been out there for more than fifteen years, I would argue: the Web. Ebooks will do best when they can be linked into Web content effectively, not necessarily on the device on which we like reading book content the best. With dozens of new kinds of mobile devices being introduced every year, now, it would be counterproductive for book publishers to try to target only a handful of devices for commercial success. It's best for ebook publishers to enable their content to "play well" on as many devices as possible and to ensure that what a reader does on one device can lead to a valuable experience for the same person on other devices that they use. For example, if I have just finished reading a chapter in a book about the state of business and economics in China, that's a great opportunity for book publishers to be able to apply metadata and keywords relevant to that chapter to other services that I as a reader may use. Some of those may be integrated into the ebook reader directly, but I'd probably appreciate them in a private email or messaging service delivered on a platform where I can consume or purchase other forms of content easily. Publishers should think of the ebook itself as just one item in a systematic approach to engaging audiences interested in specific authors and topics. Some of that approach may be delivered best via a publisher or a bookseller on their own portal, but their metadata may lead to rich experiences on partner platforms as well, triggered by contextual advertising network technologies or other technologies.
—On a related topic, are there specific capabilities that consumers are now looking for?
One of the key items that consumers ask for consistently is the ability to call ebook content their own and to be able to manipulate it the way that they would other forms of electronic content. Being able to cut, paste, share and annotate book content is key to enhancing its value in the eyes of book-reading audiences. These types of features, though, are the ones that publishers are least likely to offer to consumers without some form of rights management technology controls. While publishers have a right to defend their copyrights effectively, they have to consider carefully how content reuse and sharing can enhance the value of their products. O'Reily Media, for example, is pushing to have DRM controls removed from ebook content that they distribute, so that it can be used more effectively in collaborative environments. Eliminating DRM can also accelerate the ability of ebook content to be used by its purchaser on any number of technology platforms. This will accelerate also the likelihood that someone will actually read a book that they've purchased. In doing so, that reader is more likely to follow up with more purchases of similar content or value-add content associated with that title.
When you think of it, a paper edition of a book has nothing more than the copyright symbol to protect the legal rights associated with its content. Why would publishers want to frustrate consumers who have already demonstrated via music download purchases that they need the ability to transport content that they've purchased to new types of devices easily without the frustration of dealing with incompatible DRM systems? Ebook services need to enforce copyright but also enable the value of ebooks in as many contexts as possible. DRM services as designed today make that relatively hard to do. What is really needed for ebooks is a built-in ecommerce service that enables both the purchase of ebooks on a person-to-person distribution basis and that enables other types of ecommerce for related content and experiences. For example, if someone forwarded me a link to an ebook for possible purchasing or sharing, I should be able to be presented information about attending upcoming book talks by the author near me automatically on an opt-in basis or related titles or videos that are available. In other words, we can use the offering of content sharing as a revenue-generating experience from many angles.
—Are there any particular e-reader devices coming out in the near future (or that came out recently) that really stick out to you as being potentially influential devices?
Apple's iPad is bound to be an influential ebook reading device, if but because it introduces color formatting to ebooks in a user-friendly design, but I think that the most influential ebook technology will not be any one specific device but the ePub ebook publishing standard. This standard is gaining wide acceptance as a common format for ebooks, although rights management services may differ from publisher to publisher for ebooks published using that standard. Cross-platform standards will help to make ebooks accessible on more devices more rapidly than any one "magic bullet" device can afford publishers. The Nook ebook reader released by Barnes and Noble features ebook content published in ePub format and has been a very popular unit so far. Other devices such as Plastic Logic's Que device are promising advanced touch-screen devices for displaying ebooks and other types of electronic documents, but they are very expensive compared to consumer devices. Probably the most important devices are mobile phones, which are the most plentiful media-displaying devices in the world today. If you can reach book-reading audiences on mobile phones, then you don't have a very effective ebook strategy.
—Are there any specific markets where ebooks have the potential to make a big impact, yet still remain more or less unexplored?
Ebooks open up the possibility of both new ecommerce models and the re-introduction of older commmercial models for books in new ways. For example, in the 19th century it was fairly common for books to appear bit by bit in periodicals. I think that it's worth considering how popular authors may prove to be a source of subscription revenues for book publishers via Web portals for periodicals sponsoring such bit-by-bit access to a book, or even via email or direct downloads onto mobile devices. Ebooks are also just beginning to touch on some of the potential for creating new opportunities in packaging content for educational markets. —Is Apple’s agency model of ebook selling the new standard? Does Amazon have any hope of holding onto its retail/wholesale model, and maintaining control of the pricing of ebooks on its website?
I think that we will continue to see a mix of retail/wholesale and agency models for ebook distribution, but publishers have a lot to gain from the agency model if they choose their partners wisely. Amazon in a sense has an agency model built in to its model in the sense that it enables people to embed "kiosks" for selling books in Web pages. Whether its an agency model or a retail/wholesale model, the important thing for publishers to do is to make people aware of books in as many contexts as possible where people are likely to have interest in purchasing them. Helping Web site developers and individuals with their own social media presences to "dress up" Web pages with information about and from ebooks will get them in front of people at the times at which buyers are going to be most likely to have their attention. —Related question: If the agency model were to become the new standard, what effect would this have on ebook pricing in general? Are ebooks going to become more expensive all around? And would higher prices benefit the industry in the long run, or potentially harm it?
Publishers are looking for better margins and retail prices from ebooks in general. While the agency model has been held up as a tool to enable better prices and margins, it's not clear that enabling publishers to set their own prices via the agency model is going to support prices and margins in the long run that much better than the retail/wholesale model. The agency model also opens the door to price competition between publishers, as they seek the right balance between unit sales and margins. So it's possible that what we'll see in the agency model is a handful of books at higher price points and a majority of books at lower price points. The main problem that book publishers face is not competition from Amazon or ever other book publishers but rather content that's been born on the Web - including ebooks that have been developed through online services. By managing information about what Web-native ebook content is most popular, this new breed of publisher may develop to become "good enough" alternatives to major publishers that many ebook consumers will be glad to consume their ebooks at price points that will be much lower - and, often enough, better integrated into online content. I think that higher prices via the agency model are fine for established book publishers in the short term, but if they don't use those improved margins to invest heavily in digital-first marketing strategies then they are going to squander the real opportunities to develop profitable ebook publishing strategies for the long run. —It seems like the multiple competing mp3 marketplaces quickly collapsed into just two or three players as the digital music market matured. Are we going to see the same thing happen with ebooks?
Just as the commonly accepted MP3 file format flattened out the music player marketplace, so will the ePub format make it harder for devices to develop proprietary appeal based on file formats alone. In the long run that's a good thing for publishers, since it means that ebooks will be useful on billions of devices rather than millions. Book publishers need to be ready to accept that this is beneficial and to prepare revenue models that are designed to maximize the benefits of rapid and broad dissemination of ebooks, taking into the account the potential power of viral marketing. What could be better than to have someone chatting about a book that they loved at a social gathering and to enable people who hear their praise to experience that book in part immediately via a tap of two mobile phones, as used in the Bump mobile application? Book publishers need to trigger sales based on social interactions far more aggressively - search alone cannot help them to build online revenues effectively.
—E-Ink, color LCD, and other display techs like Pixel Qi: what are the pros and cons of the various display technologies? What seems like the most likely way forward for the e-reader industry?*
While eInk has definite advantages under specific circumstances, such as bright sunlight and limited battery recharging opportunities, the increasing life of mobile device batteries and increasing efficiencies of backlit touch mobile displays are making eInk increasingly a niche device play. The real problem with eInk and similar technologies is not the technologies themselves but the demographics of the audiences that they serve. eInk-like technologies are oriented towards people used to print materials. The younger generation of readers has grown up rarely using paper for reading in general, so being able to duplicate a paper-based reading experience, be it in book, magazine or newspaper format, is far less important to them. Paper-analogous technologies tend to be more important to publishing executives stocked with employees who have skillsets most readily adapted to print-formatted materials. Touch-sensitive displays are particularly appealing to publishing executives for similar reasons, but these technologies will benefit Web-native materials as much as they will traditional media materials, so there's no strong reason to believe that they can develop unique market advantages through touch interfaces either.
—How do you feel about hybrid devices like the enTourage eDGe and iPad, which position themselves as being somewhere between an e-reader and a netbook? Are one-purpose e-readers like the Kindle becoming a thing of the past, or is there still potential there?
I think that there's still definitely a place for limited-function ebook readers. Books are a very personal experience for a reader. Book readers tend to use books as an opportunity to spend one-on-one "quality time" with a particular author, tuning out other stimuli to concentrate on what is usually a very carefully prepared manuscript. With that said, though, people find themselves shifting from a book-reading frame of mind to their online frame of mind fairly rapidly and fluidly. For these situations, having an ebook on a multi-function platform can be very beneficial to publishers, as it may allow them to take those moments of transition to put their book content into more contexts at a time when a reader is most motivated to do so. Publishers have been drawn to simple ebook readers initially because they feel that this replicates their existing relationship with readers more effectively - and they do, by and large. But in limiting their vision of their relationship with readers to their existing models, in part to prevent duplication or sharing of book content, they have shut out books from the billions of people who interact with content and with one another every day on the Web. Standalone ebook readers will continue to have appeal, but these devices must enable readers to interact with the Web through other Web-enabled devices more effectively. For example, though I may not want to do social media sharing of a passage from an e-book via a Kindle or a Nook ebook reader directly, I should be able to build a queue of excerpted passages that I can then manipulate via a mobile phone application to share with others. Labels: agency model, amazon, apple, books, DRM, eBooks, eInk, ipad, publishers, retail, wholesale
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By John Blossom - posted at 4:37 PM |
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| Friday, June 19, 2009 |
 There has been a virtual tsunami of new product announcements coming out of Google lately, a wave of innovation that makes you wonder at times why private investors were so intent on putting money into in media companies with inflated multiples recently while content companies like Google were sinking significant funds into core product improvements. With consultants left and right making money telling companies how to be more innovative, the simple answer seems to be to invest in it. One key investment from Google is a new project revealed by TechCrunch named "Flipper" that offers a very different look to its online news search services through thumbnail images of news articles.
Google has been making extensive use of its thumbnail graphic generation technologies in many of its services, including up-to-the-moment screen grabs of pages recently visited in its Chrome Web browser. In the Flipper project, however, Google is showcasing not random pages selected by a browser user but articles selected by its news search engine. The thumbnails in the Flipper demo show a good chunk of the layout of selected news pages, grouped in various categories such as recent articles, hot topics, specific publications, most viewed and so on. The effect of this technique leave a strong impression that one is looking at a customized newsstand - except that instead of looking at the covers of magazines and newspapers one is looking at the images of specific articles tailored to a person's interests.
In an era in which search engines have made any page a potential first-visited front page for Web sites, this concept is particularly important to publishers. The graphics, multimedia and value-add content are supposed to be key differentiators for mainstream publishers' content, but in today's search engines these valuable assets are not well exposed in comparison to other sources when typical search results expose little other than a headline and a snippet of text. Thumbnail images can give a news browser a quick sense of which articles have deep and engaging content and which ones are a little bit thinner on content. That could turn out to be a key plus for publishers trying to differentiate their wares amidst a sea of potentially acceptable substitute content sources.
Of course, this will also put more pressure on publishers to focus more on ensuring that the layout of their content will turn out to be appealing in a newsstand such as the Flipper project is showcasing. But its likely to be beneficial pressure that may enable publishers to rise above competitors based on virtues other than search engine optimization. It also may enable advertisers to get a better sense that premium publishers offer qualities that run deeper than mere page view statistics - and to realize that providing content on publishers' sites that adds to the visual and editorial value of a publisher's content is an increasingly important virtue for promoting their advertising goals. While it's still unclear as to whether Flipper will see the light of day in its current form, it's a technology that is well adapted to mobile markets as well as PC browsers - and as such is likely to work its way into many Google offerings in the foreseeable future. Labels: design, flipper, Google, News, project, publishers, techcr, thumbnails
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By John Blossom - posted at 4:07 PM |
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| Monday, June 01, 2009 |
 BookExpo America is one of the premier U.S. trade events, encompassing more than a few Wal-Marts of display space wherever it sets down. This year's event in New York was no exception, but more than ever there was a pall in the air of its exhibit halls as much of the paper-based world of books began to come grinding to a halt in recessionary times. The other key factor, of course, was the meteoric rise of premium ebooks on Amazon's Kindle device, a blessing for publishers needing quick revenues without inventory commitments but a curse with its draconian revenue cuts and control over unit pricing. Who would have thought, then, that the name of Google would come along to offer the book industry...some hope?
As counterintuitive as it may seem to some, the light is finally going off in more than a few minds in the book publishing industry that Google's neutral stance on delivery platforms and its popularity as a destination for book readers courtesy of its library book scanning project may combine to offer publishers a more sane "plan B" for online publishing than they had originally thought. A recent New York Times article outlines some apparently positive responses from publishing executives to Google's strategic partnerships director Tom Turvey saying "We really mean it" to going live by the end of 2009 with Web-based premium ebook sales on all major PC and mobile devices. One key incentive to teaming up with Google: the promise to give publishers complete say over unit pricing.
The technology making this possible, though, is still a bit shaky. Turvey mentioned that books would be available offline only through Web browser caching capabilities; otherwise, your ebooks will be ready and waiting online for you. This is less optimal than the reader-centric features of Amazon's Kindle reader, but given the increasingly universal presence of Web connectivity, it's probably not a major hindrance for many readers more used to online access. It also underscores yet again the re-emphasis by Google of the importance of the Web browser as the most powerful platform for cross-platform electronic content delivery. "Lock-down" of content is easy enough for ebooks in whatever container a publisher would like in a browser, but more importantly it gets to live in a medium that doesn't require them to negotiate distribution deals with an expanding universe of platform providers with each new twist in their technologies. This is also bound to make more of their cash-strapped book consumers happy.
While Turvey made it sound after a fashion that Google had slipped on ebooks as a product priority, clearly there were a few other product priorities that needed to fall into place. With Google's Android operating system taking off now on both smart phones and netbooks, there is a growing Web counterforce to proprietary technologies that were hemming book publishers in to platforms that would ultimately hinder ebook growth. Google's new Wave messaging and collaboration technologies are likely in time to accelerate Google's ability to build real-time conversations around books, enabling publishers to create richer content to engage readers without having to invest in technologies that would take them away from their core editorial talents.
Although these seem to be positive trends for Google, no doubt publishers are still feeling their way through a relationship with Google that is only beginning to move past the tension and mistrust that lead up to the recent book scanning settlement covering orphaned works. It's also likely that Google will not find itself the only "plan B" that publishers investigate as they decide to expand their partnership options beyond Amazon. But when one thinks back a few short years ago when the book industry was trying to partner with Yahoo and Microsoft as alternatives to Google's book scanning efforts, it appears that book publishers, willingly or not, are ready to pursue more aggressive marketing strategies that embrace the Web on the Web's own terms. Labels: amazon, Amazon Kindle, bookexpo america, books, eBooks, Google, marketing, publishers
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By John Blossom - posted at 10:07 PM |
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| Monday, December 08, 2008 |
 Good news about the newspaper industry has been an oxymoron at best in a sinking global economy, and today is no exception. TheStreet.com confirms the buzz that The New York Times is taking out a USD 225 million loan against its new office building off of Times Square while the Wall Street Journal notes that Sam Zell's Tribune Co. is sniffing out options for a Chapter 11 bankruptcy restructuring. Quite a change of pace from last year's triumphal posturing of new media headquarters and highly unrealistic revenue goals for private acquisitions would eventually lead to new glories. 'T'ain't working, apparently, as print ad revenues continue to crater except for feature article sections that vie with magazines for more targeted interest groups. As was noted in a study from earlier this year 37 percent of Americans go online for their news, while only 27 percent were picking up a newspaper on any given day. Newspapers in the U.S. are now officially a legacy product, though they still represent the majority of ad revenues for most news organizations. The only large markets where newspapers are growing significantly are in nations such as India, where the penetration of the Web still lags behind the thirst for news. While some well-diversified media companies are prepared for the long run of news' transition into a more electronic future, 2009 is shaping up to be the year in which the newspaper industry begins to face either massive restructuring or widespread collapse. Yet there is hope for traditional providers of news - if they can put their best efforts behind the most profitable opportunities. Here are a few thoughts as to where traditionally print-oriented news organizations must be headed in 2009 to build a more profitable future: - Get better than bloggers and search engines at aggregating news. Mainstream journalists are still equipped oftentimes with the personal networks that enable them to deliver breaking news effectively, but nobody trusts any single news organization as their source for news. Instead, many online news users are turning to bloggers, search engines and messaging services such as Twitter to aggregate breaking news on the topics that matter most to them. In other words, while referral links are highly valuable for people who bother to engage full-length news stories, the sites that provide them are the "go-to" stops for a rapidly growing number of news hounds. Getting breaking news to appear more automatically in these other venues - and to have revenue-producing ads and partnership "hooks" in that remote content - is a key factor for making the most of these aggregators. However, it also points to the lingering question: why aren't more mainstream news organizations aggregating more links from other sources in their own core news coverage? I would agree that automated aggregation services like Sphere are of limited value in this regard, but the source-agnostic form of editorial content aggregation favored by bloggers and outlets such as the Huffington Post and Newser appear to be enabling far more engagement for online audiences than "not invented here" news organizations that still insist that their own teams must create most every drop of news that they monetize.
- Love print as a service, not as your brand. In the nineteenth century newspapers grew up in buildings that housed their editorial staffs, printing presses and loading docks - self-contained factories very much in the model of that era's mass manufacturing. In the twentieth century printing presses in many markets moved away to remote locations but most still produced newsprint products only for one source of editorial content and ads. In an era in which news can be aggregated effectively by anyone, that model is no longer a cost-effective approach to print production. Print will continue to thrive as a reading format for some time, but it's far less likely that printing presses are going to be running news and ads from only one source. It's far more likely that new types of newspapers are going to be with us very shortly, ones which license news from today's newspaper staffs and other news sources and share revenues and links to online materials via Data Matrix codes and other print-to-online linking technologies. Individual news organizations are not likely to invest enough in these new kinds of source-agnostic aggregation technologies fast enough to make a difference to their bottom lines, so suffering news organizations would be smart to band together to make such technologies happen sooner rather than later. Alternatively, the time for a "Google Newspapers" printing plant in major markets that aggregates content from many sources agnostically may have come at long last.
- Enable community-generated news more effectively. Small-market newspapers and television cable news outlets have become fairly aggressive in embracing their audiences as sources of news and entertainment. Yet major newspaper chains in many markets are still struggling to get their hands around what it means to empower everyday people as news producers. Social media provides some of the most engaging content online today, yet many publishers still shy away from empowering local news gatherers that do not conform to traditional models of journalism. But many sources of community-generated content - sports scores, traffic reports, eyewitness news - are highly engaging sources of content that can be monetized easily. In an era of real-time broadcast news alerts from anyone on services such as Twitter newspapers need to rethink what's the best way to engage a community that already knows how to publish to one another.
There's no doubt that many news organizations are hitting the right buttons in making decisions on the future of making money from news, but the pace at which those decisions are being made has left a gaping chasm between the cost of sustaining their greatest revenue-generator - print publishing - and the cost of investing more heavily in online publishing methods that will carry them forward to long-term profitability. As much as online is the answer, though, I think that it's time for publishers to take a far more radical approach to print as soon as possible. Print will survive and thrive - the only question is, in whose hands? The time to release the medium from the brand is at hand, and it can come none too soon for most news organizations' bottom lines. Labels: newspapers, print, publishers, turnaround
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By John Blossom - posted at 11:41 AM |
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| Wednesday, October 22, 2008 |
 The announcement of Oracle's deal with content connector specialists MuseGlobal, Inc. to deploy their EverConnect technology for Oracle's Secure Enterprise Search platform may appear like a passing note in enterprise search at first pass, but it's worth more than a casual glance if you're considering the future of high-value content services in enterprises. Oracle Secure Enterprise Search already comes equipped with a library of content source connector modules that make it possible for enterprises to integrate a wide variety of enterprise content sources into their search interface. Oracle is using MuseConnect, a platform-specific version of MuseGlobal's EverConnect content connector technology, to extend its search reach to include specific types of external content targeted at specific industry verticals, including Web and subscription sources for finance, legal, medical education and research. Oracle is not alone in trying to integrate internal and external sources of content to better their value propositions for their enterprise clients, of course. Many enterprise publishers already have infrastructure that is designed to integrate enterprise, Web and subscription content sources on their own publishing platforms while other enterprise search vendors such as Google are also deploying content connectors for a wide variety of content sources to build up the value of their enterprise search engines. Not surprisingly, MuseGlobal technology figures in more than a few of these vendors' efforts, with each of them doing their utmost to define a useful aggregation of content that will add value to the daily workflows of enterprise workers. Content connector technology acts as the "glue" that makes such aggregation possible, widening the range of content sources available through a seamless interface and ensuring reliable access. Content connectors are enabling a wider array of platform providers to create useful applications based on "content clouds," aggregating content from as many sources as possible with access to any specific source a technical detail that is generally not a concern of a person using the platform. If history is any predictor of the future, these content cloud applications that can combine enterprise and external sources of content are going to be powerful tools in the hands of organizations trying to make sense of large amounts of information on a day-to-day or moment-by-moment basis. Just as investment banks in the 1990s drove their profitability to new heights based on networked content source connectors that fueled powerful financial software to drive desktop and automated trading decisions more effectively, so will content clouds built for enterprise platforms enable a wide variety of 21st century organizations to become aware of threats and opportunities in their marketplaces and develop more powerful decision support services based on the widest range of quality content sources available. So while you may think of content connectors as search engine technology, it's safe to say that their ability to connect powerful applications to a wide variety of content sources puts them in the middle of the "content clouds" that are likely to drive publishing and content technology profitability in many enterprises for years to come. Technology companies like Oracle, IBM, EMC and Google want to make sure that they can drive up their enterprise value propositions based on those clouds, of course, even as enterprise publishers try to do the same from their well-established position of creating insight from content sources. Certainly technology such as MuseGlobal's MuseConnect content connectors focused on content sources for specific industry verticals can help them to do that. In the meantime, though, the biggest winners in this wrestling match to deliver enterprise value may be the companies that can deliver the content clouds that clients want most effectively. That certainly was the case with trading room systems vendors in investment banking, so I don't expect it to be too much different as content clouds begin to become the focus of a wider range of enterprise publishing efforts. Keep your eyes on the content cloud experts, folks - and may the most seamless and flexible clouds win. Labels: cloud computing, content clouds, content connectors, databases, enterprise, museglobal, oracle, publishers
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By John Blossom - posted at 9:20 AM |
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| Wednesday, October 01, 2008 |
 I am going to be moderating a panel on the opportunities for publishing in cloud computing on November 19th - more to come on that - so needless to say my head is in the cloud (computing) to some degree already. But when Microsoft announces a major initiative to adapt its Windows operating system for cloud computing for Amazon's web services platform you know that the balance of power is shifting away from enterprise servers faster than you might think. This is great news for network services providers and potentially good news for Microsoft, whose desktop Windows operating system is becoming ever more ponderous and is being readied for a crash diet. The bottom line from a technology perspective is that we're returning to the days of complex technology being "out there" in the network and user-oriented technology being oriented away from general computing and towards serving up content from network services. The move towards cloud computing may seem rather "back to the future" in some ways for those of us who lived through the days of mainframe computing and (really) dumb terminals, but when did it really make sense for companies to have thousands of dollars of over-complex content and software on people's desks in the first place? The network is the natural place for most content services to live, making it far easier for peers to communicate and collaborate with one another as publishers and to provide them with the ability to benefit from sophisticated services with a minimum of in-your-face technology hassles. This is no surprise to publishers that are succeeding with the move to online digitual publishing services, but it does pose an issue for content and technology companies that had been focused on enterprise sales. In recent years much of the "value-add" component for sophisticated enterprise content services and the technologies that support them has revolved around tailored software and information services based on integration with enterprise I.T. platforms. The early enterprise entrants in cloud computing such as Salesforce.com's network-based services have strong participation from many enterprises, but the big push for margins has positioned many enterprise content providers towards strategic sales that involve I.T. teams in major companies. Cloud sales were an investment in the future, to be sure, but present revenues were focused behind the firewalls of enteprise publishing clients oftentimes. Clearly the rapid acceleration of enteprise-oriented I.T. services towards network services available via highly scalable Web infrastructure is going to put more and more pressure on this line of marketing for high-end enterprise publishers. Web services, which enable publishers to integrate their content easily and rapidly with other content via standardized programming techniques, are flourishing in cloud computing environments, enabling user-defined "mix and match" content services intergrated into a wide variety of platforms and productivity tools. This is good news for publishers who want to get their content up and running as quickly and as easily as possible in enterprise-oriented applications - but bad news for publishers who wanted to sell people on the idea that doing so was really expensive and hard. The go0d news for enterprise publishers is that cloud computing is likely to spawn a widening breed of tailored content applications that can be deployed more rapidly and efficiently. Long and risky product development cycles for advanced publishers are likely to give way to general frameworks for cloud-enabled content applications that will have easily tailored core functions that can be changed to meet individual client needs more rapidly. In the process of doing so, many major aggregators may begin to look at what their real core strengths need to be, leaving some likely to look further and further afield for just the right content sources to aggregate as needed for specific client applications. Instead of focusing on database curation, it's more likely that tomorrow's major enterprise publishers will be focused on Web services curation, being experts in assembling just the right content from any number of databases and Web sources that meet their clients' needs. While in many instances existing staff skill sets will be transferable to the cloud computing environment, I expect that more than a few of the major publishers are ill prepared for the cultural leaps required to survive and to thrive as content services experts in cloud computing. We're all familiar with the reogranizations that have been the focus at major enterprise publishers such as LexisNexis that are aimed at blasting away very I.T.-centric product development cultures in favor of more client-centric cultures. What happens when the Web services-centric model of cloud computing impels these companies to accelerate the culture change for their core revenue lines that much more quickly? There are great opportunities for major publishers in the shift to network-oriented enterprise services, but I suspect that more than one five-year plan may be floating out their H.Q. office windows shortly as the depth of the impact of cloud computing services on the enterprise content industry becomes more clear to them. Labels: amazon, cloud computing, enterprise, LexisNexis, Microsoft, publishers
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By John Blossom - posted at 9:07 PM |
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| Tuesday, June 03, 2008 |
 This year's BookExpo America in Los Angeles featured much of the usual multi-story ballyhoo of years past, with a thinner crowd and thinning expectations for the book industry in general, though with a few bright exceptions. One of these exceptions has been Amazon's Kindle eBook reader, which has become the Pet Rock of the 2008 book industry. Still inscrutable in terms of its limitations (no PDFs, no general Web content) and as awkward as ever, the Kindle is the darling of book-readers on the go who can't afford the space, time or trouble of loading multiple books in their overnight bags and pocketbooks (and yes, one of them might be me when I break my el-cheapo mental barriers). It's also becoming the darling of traditional media outlets, which have the ability to push print-like materials into a medium that's unbound from print production limits, enabling them to maximize revenues when a title gains its peak value in a very short period of time. AP notes that former White House press secretary Scott McClellan's new book on his experiences in the Bush administration sold out quickly at Amazon in print format but that the book continued to sell briskly in Kindle eBook format, albeit at a lower price. There's some question as to exactly how much Amazon really makes on the book sales themselves (the New York Times claims along with others that Amazon takes a bath on each Kindle book sale), but as Amazon CEO Jeff Bezos noted that the Kindle is still in its developmental phase it's likely that book publishers' existing business models are considered a part of the platform's developmental cost at this point. Silicon Valley Insider's back-of-the envelope model for Kindle sales noted that if the Kindle business scales as quickly as Apple's iPod/iTunes business scaled it's possible that Amazon could be enjoying more than USD 740 million in combined Kindle device and content sales by 2010. That's highly speculative, especially given that there had been more than a decade of well-established consumption of music via online portals before the iPod came along to become a cool fashion tool for content amongst the young. Book publishers face a far tougher proposition of moving beyond a graying population of book enthusiasts still young enough to value technology as a status symbol towards younger generations that have yet to discover books at all in a big way. A whole generation of college students is now coming of age that has not ever turned a paper page on a regular basis. So Kindle's ability to grow rapidly beyond its early adopters into iPod-like growth is still in question. That may suit book publishers just fine in the short run, given their need to maintain a pricing structure that covers the 99 percent of their sales still done in print. But now that they have locked themselves into a proprietary DRM-secured format for Kindle content they have in essence handed Amazon the keys to the paper mill for electronic content. Certainly Sony's eBook platform provides a "Brand X" that will generate the illusion of consumer choice in eBook reading, but with the extensive infrastructure and branding of Amazon people wanting to purchase content rapidly for their eInk-displayed content will have but one real choice. If in fact eBook sales rise rapidly enough to push Amazon into a position of dictating book industry pricing, then book industry executives may be wondering why they didn't consider the music industry's death at the hands of iPod's proprietary 99-cent downloads as a lesson to have been studied more carefully. Fortunately the book industry has the opportunity to adapt to these changes in relative slow motion compared to the music industry's fast-forward realization that Apple had stolen their business model. In doing so book publishers may want to consider how music companies are learning to benefit more from broader artist management services as a supplementary line of business. As noted in The New York Times recently Universal Music Classical Artists Management and Productions has been formed as a unit to produce and profit from live performances of music and artist fan items other than CDs. Thinking of the good fortune my friend David Meerman Scott has had on the speaking circuit in the wake of his runaway hit business book " The New Rules of Marketing and PR" (available as a Kindle book also, of course), how much more could his publisher have profited from his management as a speaker as well as from his imprinted word? At the same time book publishers are becoming smarter about benefiting from the value of book content in pre-print communities as well. My own relationship with John Wiley & Sons has enabled content from my own forthcoming book " Content Nation" to be posted online and publisher programs such as O'Reilly's Rough Cuts are well into developing pre-print subscription communities for tech book consumers that act more as knowledge exchanges than peeks at books before publication - artist management for art still in the making, if you will. So although there are certainly exposures that publishers face via Amazon's proprietary eBook platform they are already developing more diversified revenue channels to maximize the value of their content. Future iterations of the Kindle are no doubt going to change the shape of this debate significantly, but for now it's probably good that the intense interest in Kindles from a relatively narrow band of book readers is probably going to grow more slowly than some would think. It opens the possibility that book publishers will be able to develop an approach to eBooks that will open the marketplace to far greater competition amongst technology platform providers - and more opportunities for more ways to package and sell content on eBook platforms. Although the Kindle itself is proprietary it is using the Sprint telecommunications company's broadband wireless network in the U.S., a strong network with standardized communications technology that could easily accommodate any number of services providing downloads of eBooks and other media. Enabling any media service to provide subscription or on-demand downloads into any device at a cost lower than typical broadband Internet services via such a network might accelerate a market for competitive platforms before Amazon gets to flood the market with cheaper Kindles at a not-so-distant future point in time. Here's hoping that publishers of books and other media jumping in the Kindle bandwagon think carefully about who should be in control of their distribution mechanism before locking themselves into being curators of content proprietary to emerging mobile platforms. Labels: amazon, broadband wireless, eBooks, kindle, publishers
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By John Blossom - posted at 2:34 PM |
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| Thursday, October 11, 2007 |
 There are any number of people highlighting pop music superstar Madonna's jilting of her contract with Warner Bros. Records in favor of events producer Live Nation, the loudest of recent label signoffs that include pop bands Radiohead and Nine Inch Nails. Music publishers have been squirming desperately to keep consumers from dropping their habit of purchasing copyrighted content from them with lawsuits, DRM and any other types of mechanism they can manage, but sadly they have been unable to overcome the key factor in today's media: distribution is dead and relationships in the right venues rule. To me the key factor leading up to this move was no doubt the bellweather Rolling Stones tour that recently completed with a record USD 500 million-plus in the bank. When creaking, croaking rock stars can pocket half an extra-large by filling arenas with little more than name recognition, why do they need allegiances to plastic disk distributors to reach people who love them? I am reminded of our definition of content posted on Wikipedia in this regard: " Information and experiences created by individuals, institutions and technology to benefit audiences in contexts that they value." Events are content by any measure under this definition. We are seeing artists whose primary value comes to life in venues in which they can develop relationships with audiences discovering that music publishers are failing to help them build those relationships effectively in an era of Web-based content distribution. By focusing on protecting the unit sales of copyrighted materials music publishers lost the opportunity to negotiate a compelling position for themselves in the relationship building business that is at the heart of today's Web-powered content industry. Events producers know how to build a crowd and work it for maximum profit in the venues that matter most to an artist's audience. This contextual approach to profiting from content is as old as artistic performance itself and one that is the dominant factor in the music industry yet again. Online venues such as social media sites that help artists to merchandise themselves to their fan base through videos and downloads and sponsored appearances help them to profit from relationships in valuable contexts as well. While the labels crow aoout six-figure copyright infringement suit awards and try to sue people for listening to someone else's radio at work these punitive actions only seem to decrease the value of their brands as credible venue sponsors that could build the marketable value for their artists. Relationship marketing is all the rage on many levels of the publishing industry, including B2B trade publishing. B2B publishers are discovering that where once their events marketing was the tail on their revenue dogs increasingly events marketing and marketing through Cost-Per-Action pricing is putting more emphasis on conversational content and collaborative marketing efforts. Social media venues that are becoming increasingly popular in publishing add to the mix of content-as-a-marketable-venue plays that have little to do with yesterday's mass production publishing culture. It takes a different kind of producer to succeed in producing this kind of revenue mix - a factor that both music publishers and other publishers need to adapt to as quickly as possible. You can always make money selling copyrighted content, but today's money is in marketing what cannot be copied - the unique venues and the relationships that they foster built around valuable content. Labels: CDs, downloads, events, labels, madonna, music, publishers
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By John Blossom - posted at 3:48 PM |
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| Wednesday, September 12, 2007 |
 CNET News reports in the past tense on the net neutrality movement, the effort by a coalition of online publishers and technology companies to keep U.S. telecommunications companies from charging different rates for Internet access based on arrangements with content partners. CNET notes that in the wake of last year's successes in stalling changes to current policies and new focus on carving up the 700 MHz radio spectrum for wireless broadband access the movement has become fragmented. The original "It's Our Net" group has reformed as the Open Internet Coalition, trimmed down from 148 to 74 members, with major technology and portal players such as Microsoft and Yahoo out of the picture. Notably Apple was never a part of this coalition, a fact underscored by its interests in acting as a "toll gate" of its own sort as it uses its iPod and iPhone proprietary platforms to pressure media companies into price cuts for premium content. All of this could be relatively moot except that while legislators and companies may be focused on other things the communications companies who have so much at stake have certainly not forgotten their original goals in opposing net neutrality. In a parting gift to communications companies outgoing U.S. Attorney General Alberto Gonzales filed an ex parte filing (PDF) with the U.S. Federal Communications Commission suggesting that net neutrality regulations were not necessary to ensure open competition. The absence of Yahoo and Microsoft from the coalition and their advancing plans to develop premium content services may also imply that they see themselves becoming more like Apple and being able to dictate content pricing and licensing terms to a broader array of content providers through alliances with communications companies. In the bigger picture, then, the fight for neutral access to publications over public infrastructure is far from over and in fact widening with the 700 MHz spectrum also in play. In all of this traditional publishers have been largely in the background, with no apparent major role in the lobbying efforts. This seems to be wishful thinking at best, akin to the efforts of publishers to ignore the Web in its early days, but now only worse since such a large percentage of their growth depends on it. The New York Times reported dwindling revenues from their ever-smaller print editions yet a 28 percent increase in online revenues, to cite one example of robust online revenue growth. If there were a chance that newsprint or mailing costs would go up publishers would be all over it: why do they ignore potential regulations that may have a huge impact on the profit margins of their most promising new source of revenues? In the meantime the opting out of Microsoft and Yahoo from the net neutrality movement and the non-participation of Apple points towards what many publishers hope: that a handful of major portals can help along with communications providers to re-create the cable television model and create a brand advertising Nirvana where consumers behave as they ought to and pay for premium access. Yet with user-generated content and search engines providing more context for content than ever before it's not clear why consumers will be persuaded easily to opt for being charged premium prices for access to specific sources when flat-rate access has been such a successful way for them to determine for themselves what's worthwhile content. In largely ignoring the net neutrality debate publishers' hopes for controlled access are more likely to fall prey to communications companies and portals who will take higher percentages of their revenues from their online content through access channels that are not optimized for audience growth and that will give them less autonomy on pricing. The open Web may be a bit more of a wild and wooly place for some publishers but for those that have embraced it most efficiently it has been the most promising revenue and profit driver in an era where many channels are becoming far leaner and meaner. It's time for publishers to think about what's really in their best long-term interests and to begin to embrace net neutrality as an essential component for both audience and margin growth. Labels: apple, Congress, FCC, Google, Justice Department, Microsoft, net neutrality, publishers, Trends, U.S., Yahoo
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By John Blossom - posted at 3:13 PM |
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